Tuesday Report, April 27, 2010
Special to the Texas Low Income Housing Information Service
The federal tax credit program for new home buyers is catching flack from the free market forces: the real estate industry now claims home sales would have risen anyway and that government intervention was a waste of taxpayer money.
In Galveston, the first homes under the federal hurricane relief package finally go up.
The major story this week is the new Arizona Immigration Law. For a pdf version of the full stories below, plus contextual articles on social, ecological and border issues, contact Bo McCarver at email@example.com
Goldman Said to Have Been in Other Mortgage Deals
By Louis Story New York Times April 27, 2010
WASHINGTON — The legal storm buffeting Goldman Sachs continued to rage Tuesday just ahead of what is expected to be a contentious Senate hearing at which bank executives plan to defend their actions during the housing crisis.
Senate investigators on Monday claimed that Goldman Sachs had devised not one but a series of complex deals to profit from the collapse of the home mortgage market. The claims suggested for the first time that the inquiries into Goldman were stretching beyond the sole mortgage deal singled out by the Securities and Exchange Commission. The S.E.C. has accused Goldman of defrauding investors in that single transaction, Abacus 2007-AC1, have thrust the bank into a legal whirlwind.
Home Tax Credit Called Successful, but Costly
By David Kocieniewski New York Times April 26, 2010
Realtors, home buyers and sellers are rushing to complete sales agreements before the tax credit for home purchases expires this week.
Home buyers must have a deal by April 30 and close by June 30 to qualify for the federal tax break, up to $8,000 for first-timers and $6,500 for those merely moving to a different residence.
Though the Treasury Department and the real estate industry have termed the program a success, helping 1.8 million people buy homes, many tax policy experts say it has been singularly cost-ineffective: most of the $12.6 billion in credits through end of February was collected by people who would have bought homes anyway or who in some cases were not even eligible.
The credit has caused a surge in sales and has been widely lauded for helping to stabilize prices. In places like Lafayette, Ind., where the number of homes sold in March was up 48 percent over last year, real estate agents say they have been inundated with buyers like James and Aubrey Green, students at Purdue University, who said the credit had persuaded them to jump into the market.
Full story at: http://www.nytimes.com/2010/04/27/business/27home.html?hp
Many struggle with rising rents across the U.S.
By Tony Pogh McClatchy Newspapers April 24, 2010
WASHINGTON — The gap between the cost of renting a modest apartment and the wages of working families continues to widen, according to a report released last week from the National Low Income Housing Coalition.
Out of Reach 2010 paints a gloomy picture for the nation’s nearly 38 million renters, who make up a third of U.S. households.
On average, a family must earn $38,355 a year, $18.44 an hour, to afford a simple two-bedroom apartment at the 2010 national average fair market rent of $959.
However, the average wage for U.S. renters is $14.44 an hour, down from $14.69 last year. Further, more than 60 percent of U.S. renters live in counties where even the average one-bedroom fair market rent of $805 isn’t affordable for average wage earners, the study found.
Full story at: http://www.chron.com/disp/story.mpl/business/realestate/6974473.html
Dodging Social Pressures, Renters Enjoy Flexibility
By Curt Nickisch NPR April 27, 2010
The housing bust has more people reconsidering the merits of renting but there are consumers who deliberately choose to rent.
Prashant Jeloka and Meenal Bagla moved to Boston during the housing boom when all their friends were buying.
“There’s a lot of social pressure,” Jeloka says. “Everyone seems to think that renting is not as good as buying.”
But when the couple sat down to do the numbers, owning didn’t add up.
Full story at: http://www.npr.org/templates/story/story.php?storyId=126298763
Plano housing worker used own agency’s aid to buy boss’s house
By Theodore Kim Dallas Morning News April 26, 2010
The longtime executive director of Plano’s housing authority sold her home in 2003 to a subordinate who used federal housing aid to help cover the down payment, documents show.
Helen Macey, whose agency is in charge of administering federal housing assistance in Plano, says the transaction was vetted and no laws or ethics rules were broken.
Yet the purchase has drawn the attention of federal housing investigators.
Earlier this month, the federal Department of Housing and Urban Development’s Office of Inspector General requested documents about the matter from the city of Plano, according to an exchange of memorandums between the two parties.
Full story at: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/042710dnmetplhousing.3e6602d.html
Ike recovery-funded houses to be built
By T.J. Aulds Galveston County Daily News April 22, 2010
The signs in the yards sum it up: Two couples whose houses were destroyed by Hurricane Ike soon will be in new homes.
A couple in San Leon and another in Hitchcock are the first to have new homes funded by federal dollars managed by the Galveston County Disaster Housing Assistance Program.
Housing officials said construction on the two homes could begin next week. Construction shouldn’t take long. The houses, built by League City-based American Homestar’s Oak Creek Homes division, are modular houses. They are prefabricated at a plant in Fort Worth and hauled to the homesite.
Full story at: http://www.galvnews.com/story/155451
FEMA flood maps confuse, anger homeowners
By Bill Hanna Fort Worth Star-Telegram April 24, 2010
FORT WORTH — John Williams moved to the Creekwood neighborhood for a new energy-efficient home and views of a small lake behind his back yard.
But for him and his neighbors in the far north Fort Worth subdivision, which borders Saginaw, the creek behind his home became an unexpected hassle when new federal flood maps incorrectly showed about 40 homes in the 100-year flood plain.
Even though the tight-knit group of residents knew that it wasn’t true, proving it to the Federal Emergency Management Agency — and their mortgage companies — wasn’t easy. They started calling elected officials and the developer and filing open-records requests with local governments for building permits.
“I knew my home wasn’t in the flood plain,” said Williams, a former Haltom City councilman who started helping his neighbors as they received letters from their mortgage companies. “And if it was in the flood plain, then somebody screwed up and was going to be buying back my house,” he said.
Full story at: http://www.star-telegram.com/2010/04/24/2140293/fema-flood-maps-confuse-anger.html
New solar-energy program for Dallas-Fort Worth homes sees big response
By Jack Z. Smith Fort Worth Star-Telegram Apr. 26, 2010
Mary Ellen and Ray Kramer considered putting solar photovoltaic panels on the roof of their 2,800-square-foot home two years ago. But the price tag of $30,000 to $40,000 was cost-prohibitive, Mary Ellen said.
The retired Pantego couple felt that they might not “be here long enough” to recoup such a large investment through savings on their electric bill, she said.
But that was before TXU Energy announced in February that it is pairing up with a California-based company, SolarCity, to launch a groundbreaking residential solar energy program that doesn’t require homeowners to put up any money in advance. There is no upfront cost for installation, and homeowners can instead make monthly lease payments on the solar panels. The savings on electric bills generally can be expected to exceed the monthly lease cost, TXU Energy and SolarCity officials say.
Full story at: http://www.star-telegram.com/2010/04/26/2144012/new-solar-energy-program-for-dallas.html
Wendler: Austin fails at low-income housing
By Ed Wendler Jr., Local contributor Austin American-Statesman April 6, 2010
Being a liberal, I cringe when hearing of government waste because it gives ammunition to those who claim “government is the problem.” Unfortunately, I cringe at the City of Austin as often as I do at Congress, and that’s saying something. Even when city officials have good intentions, they mess it up. That’s the case with the $55 million of housing bonds that voters approved in 2006 to help low-income families find shelter. Admirable idea, terrible execution.
Full story at: http://www.statesman.com/opinion/wendler-austin-fails-at-low-income-housing-530841.html